Charities eye slice of Obama’s stimulus pie

Like many nonprofit executives, Robert B. Jones has been scouring the fine print of the economic-stimulus law that was enacted in February. The legislation provided about $575 billion in federal money for projects to pull the country out of recession by creating and saving jobs­ — and charities are lining up to seek a piece of the pie.

"We're going full-bore on applying for everything we can," says Jones, president of Children's Aid and Family Services, in Paramus, N.J.

He is not alone. Charities across the country have been eyeing the American Recovery and Reinvestment Act, which provides billions of dollars to projects in areas like the arts, child care, health, homelessness, special education, and job training — a seeming oasis in a desert of economic hard times.

"The economic-stimulus package is going to be a real lifeline and a stream of hope for many of our nonprofits," says Glen O'Gilvie, chief executive of the Center for Nonprofit Advancement, an association of charities in the Washington area. "The lifeline is not just for the nonprofits who otherwise would have to lay off even more staff, reduce and cut programs, and maybe even close their doors, but also to the community that uses all these great services."

A 'pent-up desire'
Others, however, worry that organizations are building up false hope, saying the stimulus money will bypass most of them and will not resolve the economic distress afflicting the nonprofit world as a whole.

"There is such a pent-up desire, hope, that exists out there that there's going to be a life preserver thrown to everybody," says Tim Delaney, chief executive of the National Council of Nonprofits, which represents small and medium-size charities.

He says because the package is designed to get money into circulation quickly, most of it is likely to go to bigger charities that already have ties to the government agencies that are awarding the money.

The Chronicle of Philanthropy Click here to read additional stories about how nonprofits are seeking and using federal stimulus funds, including: Community health centers expand services with the additional federal money. Charities eye ways to put AmeriCorps volunteers to work. Rethinking homelessness through creative uses of stimulus funds. Food-and-shelter charities face growing demand due to foreclosure victims. Arts groups hope infusion of federal money will help avoid layoffs.

"This is not necessarily going to trickle down to the small nonprofit community organizations that are very much in a desperate situation today," agrees Ken Goldstein, a nonprofit consultant in Santa Clara County, Calif.

He says he worries that potential donors might hold back on their giving because they assume, wrongly, that federal spending is going to save those groups.

Some experts are also worried that the quick influx of money could be hard for some charities to manage.

"There's the potential that organizations are going to be required to grow really quickly and may not yet have the organizational infrastructure to manage that growth," says Kathleen P. Enright, president of Grantmakers for Effective Organizations, noting that government grants do not cover the full cost of providing a service.

But some nonprofit leaders say they are looking at the money realistically. "It's a short-term investment, it's not a permanent fix," says Regina Birdsell, president of the Center for Nonprofit Management, in Los Angeles. "It certainly is an infusion of cash at a time when we're cash-strapped."

Keen interest
In any case, interest in the potential source of new money is enormous. When the United Way of America and the National Community Tax Coalition sponsored a Webinar on stimulus money in April, the organizers expected 100 to 200 organizations to sign up. Instead, more than 1,000 registered, according to the tax group.

Those charities that think they have a chance are working under tight deadlines to submit applications, while grappling with a complicated set of procedures and timetables that vary according to which federal agency is granting the money.

While some money is awarded directly to organizations, other money passes through states, counties, or cities, which often have their own sets of deadlines and procedures.

"What we're finding is huge confusion in the nonprofit community," says Tom Triplett, a nonprofit consultant in St. Paul. "There's a huge variation among the states in the quality of information about how to access the dollars that flow through each state."

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